Over the last year, the Antitrust Division has continued its vigorous enforcement of criminal antitrust laws. During FY 2009 the Division filed 72 cases against 65 individuals and 22 companies, the greatest number of criminal cases filed in a fiscal year since 1993. The Division had 144 pending grand jury investigations at the close of FY 2009, the most pending grand jury investigations since 1992.
During the last year the Division prosecuted price-fixing, bid-rigging, market and customer allocations, and other fraudulent, anticompetitive schemes in industries including air transportation services, liquid crystal display panels, municipal bonds, Internet services for disadvantaged schools and libraries, supplies and services for War Zone locations, packaged ice, environmental services, and post-Hurricane Katrina remedial work.
The Division obtained more than $1 billion in fines during FY 2009. This is the second highest amount of total fines obtained by the Division in a single fiscal year. Since 2000, the Division has obtained more than $4 billion in criminal fines.
The bulk of FY 2009 fines were the result of the Division’s investigations of the air transportation and liquid crystal display (LCD) industries. Criminal fines of more than $1.6 billion have been imposed in the Division’s continued prosecutions of price-fixing conspiracies in the air transportation industry and six airlines and two individuals were charged during FY 2009, including:
January 22, 2009
LAN Cargo S.A., Aerolinhas Brasileiras S.A. and EL AL Israel Airlines Ltd. Agree to Plead Guilty for Fixing Prices on Air Cargo Shipments
April 9, 2009
Three International Airline Companies Agree to Plead Guilty to Price-Fixing on Air Cargo Shipments
The LCD investigation has to date resulted in criminal fines of more than $860 million to be paid by the six LCD manufacturers who have pleaded guilty, including:
November 12, 2008
LG, Sharp, Chunghwa Agree to Plead Guilty, Pay Total of $585 Million in Fines for Participating in LCD Price-Fixing Conspiracies
March 10, 2009
Hitachi Displays Agrees to Plead Guilty and Pay $31 Million Fine for Participating in LCD Price-Fixing Conspiracy
August 25, 2009
Epson Imaging Devices Agrees to Plead Guilty and Pay $26 Million Fine for Participating in LCD Price-Fixing Conspiracy
December 9, 2009
Taiwan LCD Producer Agrees to Plead Guilty and Pay $220 Million Fine for Participating in LCD Price-Fixing Conspiracy
Before 1994, the largest corporate fine ever imposed for a single Sherman Act count was $6 million. However, today Sherman Act violations have yielded 73 criminal fines of $10 million or more, including 18 fines of $100 million or more, five of which have been imposed since 2009.
Prosecution of Individuals
The Division has long emphasized that the most effective way to deter and punish cartel activity is to hold culpable individuals accountable by seeking jail sentences. The Division’s enforcement statistics continue to demonstrate that individuals prosecuted by the Division are being sent to jail with increasing frequency and for longer periods of time.
Courts imposed more than 25,000 jail days against defendants in FY 2009, which is the second highest total in Division history. The 2009 figure is consistent with the 21st century trend toward rising jail sentences. In fact, the four highest totals in terms of annual jail days imposed in Division history have all occurred in the last five years, and nine of the ten longest jail sentences imposed in cases prosecuted by the Division all occurred during this stretch.
The average jail sentence for defendants prosecuted by the Division in the 1990s was eight months but has more than doubled in the last decade, rising to an average of nearly 19 months. The average jail sentence for defendants remained high during FY 2009, reaching 24 months.
Not only are defendants prosecuted by the Division serving, on average, increasingly longer sentences, but defendants prosecuted by the Division are going to jail with increasing frequency. In the 1990s, on average, 37 percent of defendants prosecuted by the Division were sentenced to jail, but that figure has soared during the last decade, with an average of 62 percent of Division defendants sentenced to jail between FY 2000 to FY 2009. The percentage of Division defendants sentenced to jail in a single year reached a high of 87 percent in 2007, and remained high during FY 2009, at 80 percent.
Division’s Recovery Act Initiative
In 2009, the Division launched a major initiative to prevent and detect fraud and abuse in procurement projects associated with The American Recovery and Reinvestment Act of 2009. The Division launched the Economic Recovery page on its Web site through which consumers, contractors, and federal, state, and local agencies can review information about the antitrust laws and the Division’s training programs, request training, and report suspicious activity.
May 12, 2009
Antitrust Division Announces Initiative to Help Protect Recovery Funds from Fraud, Waste and Abuse
During FY 2009, the Division issued a comprehensive and updated resource on recurring issues in the implementation of the Division’s leniency program entitled Frequently Asked Questions Regarding the Antitrust Division’s Leniency Program and Model Leniency Letters (FAQs). The Division also issued revised model conditional leniency letters for corporations and individuals, and a model conditional leniency letter to be used when a leniency applicant is the subject of another investigation in addition to the leniency matter. The Division has developed the Leniency Program page on its Web site containing the FAQs, the corporate and individual leniency policies, model leniency letters, leniency application contact information, and prior speeches on the Division’s leniency program.
Evolution of Criminal Antitrust Enforcement
As the first decade of the 21st Century drew to a close, Deputy Assistant Attorney General Scott Hammond took the opportunity to reflect back on the evolution of criminal antitrust enforcement over the last two decades. This retrospective paper, presented at the National Institute on White Collar Crime, included a discussion of the proliferation of effective leniency programs, ever-increasing sanctions for cartel offenses, a growing global movement to hold individuals criminally accountable, and increased international cooperation among enforcers in cartel investigations.
February 25, 2010
The Evolution of Criminal Antitrust Enforcement Over the Last Two Decades by Scott D. Hammond